Sectoral Employment Development Strategies 

Like demand-side strategies, sectoral employment strategies begin with a strategic analysis to identify occupations and industries appropriate for, and potentially accessible to, residents of a low-income or economically distressed neighborhood. Some typical criteria in sector selection are: 

• The sector is growing or has sufficient turnover to create a significant number of job openings; Jobs in the sector pay decent wages and provide benefits; 
• Jobs have career advancement opportunities; and 
• Skill requirements for jobs in the sector match reasonably well with the skills of the target population. 

Sectoral Employment Development as Systemic Change: CHCA

One of the most successful sectoral employment programs is Cooperative Home Care Associates (CHCA), a for-profit, worker-owned cooperative created in 1985. Located in New York City, CHCA provides home health care aides to large health care providers such as the Visiting Nurses Association. CHCA's target population consists predominantly of low-income, minority women dependent on public assistance. When CHCA was launched, jobs in the home health care industry were low-paying and usually part-time, and many home care aides received only minimal training. Not surprisingly, employee turnover in the industry was high and the quality of care was often poor. 

CHCA was founded on a unique business strategy: providing higher-quality service (in an industry where quality was perceived to be a problem) at a somewhat higher price. CHCA gives its home care aides training through the Home Care Associates Training Institute. Most jobs are full-time and pay higher-than-industry-norm wages with health insurance and paid vacation time. One indicator of CHCA's success is its low turnover - about 20 percent compared to the industry average of 40 to 60 percent. 

In addition to creating better jobs for its own workers, CHCA also tries to effect the home health care industry more broadly. By providing higher quality service, CHCA raises the standard acceptable to hospitals and other major health care providers, and forces other home health care agencies to follow suit. 

Progress has been difficult on this front, but there is growing recognition within the health care industry that better trained and better paid workers yield higher quality service and less turnover. The CHCA model is being replicated in several other cities, so its impact has not been confined solely to New York. 

Focus:Hope

• FAST TRACK, a seven-week, school-to-work transition program for high school graduates. FAST TRACK simulates an industry work place, upgrades reading and math skills, teaches computer and communication skills, and exposes young people to industry standards of discipline, productivity and behavior. 
• Machinist Training Institute (MTI) offers basic and advanced level training in precision machining and metalworking. Participants can also receive credits towards an Associate Arts degree at Wayne County, Macomb and Oakland Community Colleges. 
• Center for Advanced Technologies (CAT) trains technologist- engineers who can build, operate, maintain, diagnose and repair complex computer-integrated, flexible manufacturing equipment.

Focus:HOPE also demonstrates systemic impact. It is a widely recognized training resource for the automotive industry in Detroit and Focus:HOPE has been able to utilize the community college system successfully. Perhaps most important, Focus:HOPE has opened precision machining and metalworking careers to African Americans. Prior to Focus:HOPE, these well-paying occupations were largely the province of European immigrants and their children. African Americans were generally excluded. 

Lessons from the Strategy

• Sectoral employment programs often define a sector in terms of occupations rather than a set of businesses. 

Sectoral economic development and employment development programs often define their sectors (the businesses they target) differently. Sectoral economic development programs usually define a sector in terms of the products or services it produces (furniture, health services, electronic products, warehousing). These sectors generally correspond to the federal government's Standard Industrial Classification (SIC) code system. Within these product-defined sectors, firms contain many types of occupations: from executive and managerial, to sales, engineering and technicians, secretarial support, and manual labor. 

Sectoral employment programs define "sector" in terms of the occupations the program wishes to target. These occupations may fall within one or many product-defined industries. For example, an occupation such as "home health care aide" is obviously confined to the health care industry. On the other hand, some occupations - clerical support, computer internet webmaster, systems engineer - can span multiple product-defined industries. 

The key strength of any sectoral program is specialization. By specializing in an occupation, sectoral employment programs can become highly expert at preparing persons for specific jobs and getting persons hired into those jobs. While there are no absolute rules concerning how an organization defines its targeted sector, the general goal is to find coherence. Do the occupations and businesses in the defined sector comprise a reasonably compact universe which can be thoroughly understood? 

• Labor markets can change rapidly. Sectoral projects must have some mechanism for continually updating their labor market knowledge and analysis and adapting their services accordingly. 

Employment opportunities which exist today can change dramatically over several weeks or several months. In Denver, the Piton Foundation conducted a formal and extensive analysis before launching its Careers in Healthcare Collaborative strategy and identified several strong employment possibilities. However, as the initiative was implemented, managed care began to take hold and the original analysis was no longer valid. More recently, the Asian economic crisis, unanticipated by neighborhood-oriented nonprofit organizations, has depressed hiring in certain industries. 

Labor market change speaks to the general issue of program evolution. The first intervention designed and attempted by a sectoral program is not likely to be the last. In fact, a sectoral program not continually learning, adapting and innovating, is probably not effective. Industries change, occupations change, the environments in which both operate change, and, consequently, sectoral employment programs must evolve. 

• Occupational specialization limits who can be served. 

Sectoral employment programs, by specializing in an occupation, limit who they can and should serve. Not everyone is suited to be a home health care aide or a precision machinist. Since sectoral programs try hard to provide businesses with employees who meet their needs, these programs set high standards which individuals with severe labor market barriers may be unable to meet. Consequently, a sectoral program does not by itself constitute a complete workforce development strategy for a neighborhood. Instead, it is one component of a more comprehensive strategy with a broad menu of employment and service options. 

In the same vein, another limitation of sectoral specialization is the vulnerability of a program to downturns in its selected occupation or industries. Project QUEST in San Antonio is interesting in this regard because it houses several sectoral programs (health professions, business services, environmental technology, and diesel mechanics) under one roof. This diversity reduces its vulnerability if one occupation or industry "goes south." Alternatively, several organizations in a given community can each sponsor a sectoral intervention in different sectors. 

• Successful sectoral employment strategies require sophisticated organizational capacity. 

Sectoral employment programs have been launched by many different types of organizations, including CDCs, community organizing groups, and social service agencies. The most critical factor for success is organizational maturity and success in other endeavors. Labor market analysis and subsequent design of sector-specific strategies require sophisticated skills and judgment. Sectoral programs must meet high quality standards to maintain their usefulness to businesses. 

Another factor is institutional culture. These programs have to act and think like businesses in order to be effective. For many nonprofit organizations, catering to the needs of business can create a cultural and moral dilemma. At a more practical level, sectoral employment strategies require a significant amount of time and resources for research, design, and implementation. Once initiated, the program's growth and development is likely to be slow, depending on how quickly the organization can recruit the support of businesses and other institutions. Thus, sectoral employment strategies lend themselves to highly capable organizations that can mobilize significant resources. 

Finally, sectoral employment programs require a distinctive type of leadership, one that is business-focused and entrepreneurial but also able to keep the mission of serving low-income or disadvantaged persons clearly in focus. Highly capable leaders who can operate in both the business and low-income neighborhood worlds are fairly rare. 

• Even strong sectoral employment programs have had difficulty achieving systemic reforms. 

The potential impact of sectoral programs goes beyond the number of persons it directly places into jobs. One of the great promises of sec total strategies is their potential for achieving larger, systemic change. These systemic changes can include: 

• Establishing a higher standard of wages and benefits for employees in an occupation as Cooperative Home Care Associates has; 
• Changing employer hiring practices as Focus:HOPE has; 
• Leveraging greater employer investment in skills training; 
• Establishing better defined career ladders for occupations; 
• Creating new educational and training programs at community colleges and vocational/technical institutes; and 
• Promoting collaborative approaches among groups of employers and supporting institutions.

Although sectoral programs often establish systemic change as a goal, such change has often been difficult to achieve and can get tangled in local politics. Credibility and influence develops over time. In addition, organizations may need different skills and activities than the ones needed to run effective employment programs - ones that encompass advocacy, organizing and public education - to bring about systemic change. 

• The essence of a sectoral employment strategy is that it takes the notion of the "employer-as-customer" to a higher level of commitment and sophistication. This guiding principle is applicable to other workforce development programs. 

Sectoral employment strategies are part of a general trend among many employment and training programs: becoming more responsive to employers. The best employment/training programs strive to be perceived by employers as "adding value" and perceived as a regular "player" in the industry rather than as a social service. 

Good employment programs (and this includes more traditional employment and training programs) try to become knowledgeable about the employers they serve and provide good customer service. They conduct occupational or industry analysis and recruit other institutional partners such as community colleges. They may advocate for institutional or systemic change. In fact, the line between a sectoral strategy and a customer-responsive employment and training program can be quite thin.

³⁴ Peggy Clark and Steve Dawson. Jobs and the Urban Poor: Defining and Assessing "Sectoral Employment Development," Washington, DC: The Aspen Institute. March 1995.